There is some very compelling evidence of an increased state of change for those companies who help retailers open new stores or remodel existing stores. A story on Retail Traffic says that store closings for the first half of 2012 are well ahead of last year, but that might be balanced by an increase in new store openings for the same period.
The story cites International Council of Shopping Centers (ICSC) data which has store closings in the first half of the year at 34 percent higher than in 2011 for a total of 2,329. In the second quarter alone, closings amounted to double that experienced in 2011 with 1,150 stores closing or 10.3 million square feet of retail space. The Apparel sector was hardest hit in the second quarter making up 70 percent of that or a total 803 stores.
Industry analysts are attributing this movement to healthy right sizing and are saying that the purging might continue into next year. Many of the closings are retailers shutting down brand extensions and banners that simply did not work out. Helping to offset this rash of store closings is a number of new store openings. ICSC says that there were 440 new store openings in the second quarter.
When a door shuts for one, it opens for another. The members of NARMS, and especially the members of the Professional Installation Company (PIC) division, are helping retailers get stores open in a consistent, efficient, fast and safe manner. Whether it is new construction or moving into an existing retail space, retailers are finding that it makes sense to partner with a third-party provider of build-out services when it comes to the ceiling down, floors up and walls in.
The August 2012 edition of Times & Trends from SymphonyIRI takes a detailed look at the changing dynamics in the CPG marketplace and the opportunities for both manufacturers and retailers that have resulted. The double edged sword of high costs on the supply side and constantly changing buyer behavior on the demand side is causing a shift and making success at retail a moving target. Here are a few of the key findings found within the report:
Three quarters of consumers shop in five or more channels. This finding suggests that consumer are refining their shopping strategies to the channels they feel offer the greatest value.
The battle for grocery spending is being hotly contested and is seeing a high degree of channel migration. Supercenters and dollar stores have made great gains in winning heavy grocery shoppers away from other channels.
The consumer trip mission is still evolving as data suggests that trip frequency is declining, while basket size is increasing per trip.
The drug, dollar and club channels are capturing market share across several CPG departments at the expense of grocery, supercenter and mass. These changes are not huge, but the trend is hard to ignore. There has been a huge market share gain in the health and beauty care departments in the drug channel.
The Internet is a big factor in CPG purchase behavior and is a force to be reckoned with. According to Times & Trends, online sales of CPG products grew 10-14 percent during the first quarter of 2012.
What does all this mean for the members of NARMS? As consumers migrate across channels and as brands seek to find the action, trading partners will have to reset categories, cut-in new products, experiment with new formats and remodel existing stores. The August edition of Times & Trends is another great resource for at-retail merchandising and marketing service professionals to download and have at their finger tips as they contemplate how to best serve their manufacturer and retailer clientele.
How do you know that at-retail merchandising and marketing efforts are working in the store? In most cases, satisfied customers are our best tool to measure the fruits of our labor. In the best cases, they share tangible results and data with their service provider that is mostly driven by sales or traffic data. According to a new white paper commissioned by LightHausVCI and prepared by James Tenser, principal of VSN Strategies, your customers may have even more powerful tools within their reach.
The paper, entitled The Conversion Advantage, describes rapidly maturing in-store video sensing technologies that monitor, capture and analyze how shoppers view and respond to items on display. On-line retailers already use detailed and actionable analytics to improve their sales conversion rates. This increased competition makes it necessary for physical stores to have data beyond traditional traffic counting to make more informed merchandising decisions.
The key word here is actionable. These sensing technologies, called Visual Customer Intelligence (VCI), will be adding to existing shopper marketing data to drive manufacturers and retailer customers to take action in the store. More and more, you will see clients request at-retail initiatives that are the result of using VCI. Timely and accurate at-retail execution becomes even more critical due to the ability to monitor and adjust to the results.
Ultimately, using VCI will make us all better at what we do. As at-retail merchandising and marketing professionals, it is incumbent upon us to keep track of and understand how trading partners are looking to improve their merchandising efforts. Downloading and reading The Conversion Advantage is a good first step at understanding VCI.
The column featured in What’s In-Store last week discussed the consumer behavior of Showrooming, hinted at how retailers and manufacturers are either embracing or combating the practice, and suggested that at-retail merchandising and marketing service companies can help in the process. A recent discussion on RetailWire talks about how shopping malls can still differentiate themselves as destinations and how the human element is the key.
Many malls are now featuring unique shops, in addition to the traditional restaurants and salons, such as places where people make pottery, scrapbook, make custom candles or bake. The whole idea is to evolve and adapt to a model which accentuates the aspects of shopping that are unique to the physical experience.
We know from life experience that evolution and adaptation can be painful. Our manufacturer and retail customers are grappling with the issue of Showrooming right now. As members of NARMS, we must ask ourselves, and them, how we can be of service in this critical juncture.
In many ways the answers lie in a founding principle of many of our members: the only constant is change. The members of NARMS have always been the agents of change. Whether it is remodeling a whole store, cutting in new product, introducing products through samples and demos or doing a category reset, our member companies provide the ability to execute in-store initiatives across multiple geographies, channels and footprints.
The lines have blurred between traditional and non-traditional retail spaces and our trading partner customers need us more now than ever. By taking a closer look at these new tenants in shopping malls, we may also find new areas of opportunity.
Would you be surprised to know that over 50 percent of mobile phone users in the U.S. now own a smart phone? Combine that statistic with the fact that the at-retail merchandising and marketing service industry is by its nature field based, and that consumers no longer differentiate between physical, digital and mobile retail spaces. On Tuesday, July 24 at 11:00 AM CDT, Associate Member Gigwalk will sponsor the next NARMS Webinar - Real Time is Right Now: Taking Advantage of Mobile Technology for Retail Services. The NARMS Webinar Series is brought to you through the technology of ReadyTalk.
Mobile in retail and retail services is no longer the future, it is the now. A smart phone is a computer more powerful than those of the 90s. Computers have done a lot to make in-office work more efficient. Now mobile is doing the same for field work. In this webinar, Bob Bahramipour, Vice President of Business Development at Gigwalk, will explain how mobility will change the way field work is done. You will gain an understanding of the benefits of recruiting through mobile, and how you can make sure you are hiring the best people. The hour-long session will introduce you to the technology that can help with common problems in the retail services industry such as verification, communication and coverage. You will also have an opportunity to interact directly with Bahramipour through the ReadyTalk chat function.
Bahramipour has over 15 years of experience in the technology industry. At Gigwalk, a mobile work marketplace connecting businesses to thousands of smartphone-enabled workers across the country, he is responsible for evangelizing mobile technology in the areas of consumer research and field work. Prior to Gigwalk, Bahramipour was Vice President of Business Development at TRUSTe, and has served in senior positions at YuMe and Yahoo. He attended the Northwestern University Kellogg School of Management, has a BSFS in Foreign Services from Georgetown University, and serves on the board of advisors for StumbleUpon.
There are many exciting changes going on within NARMS, THE trade association for at-retail merchandising and marketing service companies. This week, as part of those ongoing developments, the members were emailed a link to a new downloadable NARMS Member Handbook. The .pdf document is also located within the members area of www.narms.com. The handbook is a snap shot of all the features and benefits of membership and is designed to help members get maximum value from their affiliation with NARMS.
The NARMS Member Handbook provides some interesting history about the development of NARMS from the early years in 1995-96 to the present day. Another section highlights the current members of the NARMS Board of Directors. There is also a section on the new NARMS headquarters staff now located in Broomfield, Colorado.
The heart of the document lies in detailed descriptions of the benefits that are currently available to members. Among these offerings are things like the NARMS Member Directory, the Recruiter, JobBank, Career Connection, Affiliate Member Programs, Conferences, the Infoshare Library and educational resources like NARMScertifyU and the NARMS Webinar series. The Handbook also covers the various member communication tools such as NARMS Newsfeed, Top Shelf, What’s In-Store and the official Association social media channels.
As you read this Handbook, you will see that NARMS is dedicated to providing continuous improvement to the at-retail service industry. Many of our members join for one or two specific purposes and later find out that there are many support functions available in the areas of industry research, education, networking and member programs. This document will help you avail your company to those services and help you take your place as one of the leaders in the Association and the industry.
It is an understatement to say that a primary success factor for retailers and CPG manufacturers is to understand key buying groups and shopper behavior. The latest Times & Trends report from SymphonyIRI takes a look at Millennial Shoppers using data derived from their quarterly Market Pulse survey. Millennial Shoppers are defined in this report as those between the ages of 18 and 34. In reading through the report, some opportunities to reach this challenging segment come shining through.
SymphonyIRI research shows that the Millennial segment is more cautious and frugal than the generation of 35 to 54 year olds. They are much more likely to use at home beauty treatments or spend time cooking meals that, in the past, would have been reserved for restaurants. They are also 200 times more likely to be influenced by smart phone apps and depend greatly on the opinions of others and social media when making buying decisions.
The report urges trading partners to determine and understand group shopping patterns, such as preferred channels, retailers and trip missions. It also stresses the importance of exploring the potential of new products and extensions within existing lines.
There is not enough space here to share all of the key findings and we invite you to download the free report and read it for yourself. For members of the at-retail merchandising and marketing community, there is a chance to positively impact retailer and manufacturer efforts in multiple areas of the go-to-market process.
Mystery shopping services can greatly enhance trading partner understanding of key demographics. New products need to be rolled out and cut-in to existing plan-o-grams quickly and efficiently to bring return on product development dollars sooner. Reducing out-of-stocks through regular coverage calls can not only increase sales, but it can build brand image by not allowing a bad customer experience to go viral. The members of NARMS are uniquely qualified to help trading partners reach and keep the Millennial shopping segment.
For almost 30 years, Willard Bishop Consulting has been publishing its Future of Food Retailing Report with this year being no exception. The report is an annual look at current and future market share trends across the store formats that make up the food retailing industry. Today we will give you a brief overview of the findings, but you will want to download and read the free report in its entirety by clicking here.
In 2011, traditional grocery formats such as supermarkets, fresh format, limited assortment and super warehouse held a combined 46.7 percent dollar share of the food industry. Looking five years into the future to 2016, that number is predicted to drop to 45.3 percent.
C-Stores are predicted to pick up some of the dollar share. 2011 saw c-stores, either with or without gasoline sales, own 15.1 percent of the dollar share. That is projected to grow to 15.6 percent in 2016.
Non-traditional grocery outlets such as wholesale club, supercenters, dollar, drug, mass and military are projected to be the biggest winners by picking up almost a whole percentage point. These stores owned 38.2 percent of the dollar share in 2011 and that is expected to grow to 39 percent in 2016.
One of the big contributing factors to this trend is the rate of food inflation that is expected to average 3.2 percent over the next five years. Only limited assortment, fresh format, dollar, supercenter and drug sales are expected to have sales increases that trump the inflation rate.
Of course, these are only predictions based on trends. Retailers and their manufacturer partners will do everything in their power to increase their hold on the market. As members of the at-retail merchandising and marketing industry, it is wise for us to keep our ear to the ground and be ready and able to service their sales boosting in-store initiatives.
Ask any merchandising professional and they will tell you that displays work. There have been many attempts at analyzing the actual return on investment for given products and categories, but to some degree, they all deliver on the intent. Ask the same merchandising professional what the key is to display success and they will tell you that it mostly depends on if the display actually makes it to the sales floor. Retailer compliance is probably the biggest obstacle to maximizing return on the promotional dollar.
One interesting recent study connected the inclusion of dairy products in at-retail meal solutions and found some profound results. According to Dairy Meal Solutions: Merchandising Solutions, unit sales for dairy products sold via displays rose 29 percent and dollar sales rose almost 30 percent. That is some pretty convincing evidence to suggest that an investment in executing the displays in-store is a worthwhile and cost effective endeavor.
Another source says that retailer-manufacturer cooperation in both sharing data and installing displays is vital. No matter how good and cutting edge each trading partners shopper data is, it is an age old problem that always seems to get in the way. Who is responsible for actually setting up the display in the aisles?
These displays require months of planning and design and are often very costly to produce. All of that investment can go down the tubes if the display never makes it out of the backroom because the store staff does not have time or the sales organization needs to get on to the next account. Members of NARMS, the trade association for professional at-retail merchandising and marketing services companies, occupy this gap. A relationship with a third-party merchandising firm is the conduit between making sure great plans become great sales realities.
Supermarket News recently released the latest version of their annual Center Store Outlook survey. In his Viewpoints blog, Editor-in-Chief David Orgel takes a look at some of the changing perceptions that grocery retailers hold toward their most pressing competition. The easy answer is that alternative formats who add food items are the culprit. The survey suggests that grocers are learning to deal with some threats, but others are gaining a foothold.
The first threat that comes to mind is Wal-Mart. But the survey says that the perceived threat is declining and is possibly being replaced by others. The 2009 version of the survey said that 64 percent of participants listed Wal-Mart as the number one threat, 50 percent in 2010 and down to 45 percent in 2011. This year that number fell to 34 percent. Compare that to the 23 percent who listed dollars stores as the number one threat this year. Club stores and limited assortment retailers came in third and fourth respectively.
The competitive pressure felt by grocers is ongoing with other channels seeing the value of carrying food in tough economic times. When asked how they plan to battle the alternative format threat, retailers mostly said with private label and pricing strategies. Some said that do not really know and need help in that area.
Another answer is to fight off the advances of other players by executing everything better in-store, everyday. Why give your customers a reason to shop for food at a non-food retailer?
The at-retail merchandising and marketing services industry is made up of trained and experienced professionals. The members of NARMS have services and reporting technology that can ensure that out-of-stocks are held to a bare minimum. They keep shelves stocked, cut-in new products quickly, build displays, place POP, audit, mystery shop, execute category resets and perform product sampling at a time when store staffs are being cut and in-house resources are hard to find. All of this enhances the customer experience and protects market share.